Coronavirus: ‘This is purely about survival’ - nursery MD on trying to keep the company afloat
PUBLISHED: 22:13 03 April 2020 | UPDATED: 23:10 05 April 2020
A Suffolk-based nursery group has asked for a quarter-of-a-million-pound loan from the bank to stay afloat - highlighting the coronavirus-induced struggles of the industry.
Children’s nurseries are under pressure as they have been asked by the Government to remain open just for key workers and vulnerable youngsters, which has left some settings struggling with costs.
This has been the situation for Suffolk-based Alpha Nurseries, which has been forced to shut 11 out of its 28 settings - and combine some that are close geographically - as the number of children has dwindled.
The Government has said some support is available, for example the job retention scheme for businesses to claim 80% of their employees’ wages from the state, but the boss of Alpha Nurseries said he understood the cash would not be available straight away.
David Finch, managing director of Alpha Nurseries, which has six sites in the Ipswich area, has applied for an urgent £250,000 bank loan to pay staff, adding the current financial position for his company was “serious”.
“It’s become very clear now there’s going to be a lot of casualties from this [coronavirus crisis], in the nursery industry and generally,” he said.
Are parents still having to pay fees?
Different nurseries have taken differing approaches to fees, with some demanding the full amount despite children not attending, while others have opted for a discounted rate or complete suspension of payments.
Mr Finch said Alpha Nurseries had originally asked parents to pay 100% of fees even if their children were not attending, but had since changed this to 50%.
They also have the option of giving four weeks’ notice to leave the nursery, he added.
He said the Government’s staff retention scheme, or furlough, would not cover all their costs and it was currently unclear whether the firm would be able to claim for losses through insurance.
Mr Finch said he had made a commitment to parents who have paid bills in April, May and possibly June whose children have not been able to attend, that any money from insurers to cover the business interruption “I would of course use this to send back to them”.
“I am not looking to make any money out of this, just survive the next three months,” he said.
He said 130 Alpha Nurseries staff have been put onto furlough out of a workforce of 260 people.
Mr Finch added: “Part of me wishes I just shut everything and sent all staff onto furlough. It would have been easier and actually would be more cost effective than staying open for only several children, but it would have meant many key workers, including NHS staff, being left with no childcare. Nobody wins.”
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Alpha Nurseries has received some negative feedback over asking parents to continue to pay, but also support.
One family, who daughter attends Grange Farm Nursery in Kesgrave, told Mr Finch: “We totally understand the need for parents to still pay and are more than willing to do so, so that we can ensure the nursery is still there when Elise is able to return. We all need to support each other in these strange times!”
Nursery group Bright Horizons, which has more than 300 nurseries, including in Bury St Edmunds and Ipswich, has waived fees for children not currently in its settings.
The company has closed some sites, but established ‘hubs’ to help key worker families around the country.
A spokesperson said: “Bright Horizons is working hard to ensure that the children of key workers and vulnerable children continue to be looked after wherever possible. We want to make sure that key workers, people in emergency services and their families get all the help we can give them as they fight to protect everyone from the virus.”
They added: “As the public response to the crisis evolves, we are adapting as quickly as we can to the changing levels of demand from parents and availability of staff, with the health and safety of the children always being our priority.”
Some early years workers will not be able to attend settings because of health concerns, such as falling within a high risk category for COVID-19, or may have childcare issues themselves.
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What support is the Government giving to nurseries?
Mr Finch believes the Government is “not supporting the nursery sector fully in these troubling times”, and bodies that represent the sector have also expressed concerns.
Neil Leitch, chief executive of the Early Years Alliance, said they continue to urge the Government to “clarify exactly how much financial support will be available for childcare providers during the coronavirus crisis”.
He said: “Many childcare professionals are putting their own health and wellbeing at risk by continuing to work on the frontline during this pandemic to ensure that critical workers and vulnerable children have the childcare they need.
“But without confidence that the necessary financial support from Government will be available, our fear is that a significant number of nurseries and pre-schools may be forced to take the difficult decision to temporarily close their settings completely.”
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A survey by PACEY (the Professional Association for Childcare and Early Years) of more than 6,000 childminders and other childcare providers found 46% had closed their setting for the foreseeable future due to coronavirus.
And of those who are open still - many caring for drastically reduced numbers of children - 45% were concerned this was not financially viable for them going forward.
Speaking last week, Liz Bayram, PACEY’s chief executive, said: “More needs to be done to support childcare providers to survive the impact of coronavirus.
“We need to understand the long-term impact and the support all childcare providers will need, especially childminders, so that there is a strong early years and childcare sector that families can rely on when we all return to our normal working lives.”
A Department for Education spokesman said they would continue to fund childcare providers for the free entitlements for the duration of these closures, even if children were not attending, and a “significant” financial support package included a business rate holiday for many private providers and the job retention scheme to support workers.
“We expect nurseries to take a reasonable and proportionate approach to fees paid by parents, in light of these unprecedented circumstances, and to communicate any arrangements clearly with parents,” he added.
What if a nursery is not available for a key worker?
Bright Horizons said it was also doing its best to find other ways to help families of key workers where there is no hub nursery available for them.
It has just launched the website www.emergencychildcare.co.uk , which it is encouraging other providers to join, with the intention that the site will match spaces at local nurseries, nannies and childminders with the childcare needs of key workers, enabling them to carry out their vital work while knowing their children are being cared for safely.
Ros Marshall, MD of Bright Horizons, said: “We are proud to be able to play our own small part in supporting key workers and would like to express our thanks to them for all they are doing to help everyone.”
The Government has said settings should try to remain open to support vulnerable children and those of critical workers, but “we understand that this may not be possible for all settings, for example, due to staff shortages or illness”.
“Childcare settings should work with local authorities to agree the provision needed locally to support the needs identified,” a Government spokesperson said.
Christina Lewis, head of service for early years and childcare at Suffolk County Council, has asked providers to continue to supply information to the local authority about the need for places and their ability to provide them “so that we can continue to broker places and support local collaborations”.
She told early years providers: “The work of setting staff continues to be critical to the national efforts and every child that you are keeping safe makes a difference. You must ensure that you and your staff are able to have some rest over the coming weeks while maintaining this provision.
“We need you to stay well to continue with the fundamental support work that you are providing.”
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